FOR IMMEDIATE RELEASE
Nov. 5, 2007
Contact: Abigail McDonough
202-225-6511
KANJORSKI BILL, H.R. 3837, GAINS SUPPORT FROM
NEW YORK STATE ATTORNEY GENERAL ANDREW CUOMO
Cuomo's Recently Filed Case Builds Momentum for Legislation to Enhance Appraisal Independence and Halt Appraisal Abuses
WASHINGTON - Today, Congressman Paul E. Kanjorski (D-PA), the Chairman of the House Financial Services Capital Markets, Insurance, and Government Sponsored Enterprises Subcommittee, received support for his recently introduced H.R. 3837, the Escrow, Appraisal, and Mortgage Servicing Improvements Act, from New York State Attorney General Andrew M. Cuomo. The Attorney General announced his support for the bill at a press conference on Capitol Hill.
"Attorney General Cuomo's case reinforces the need to enact my Escrow, Appraisal, and Mortgage Servicing Improvements Act," stated Chairman Kanjorski. "Appraisal independence is essential to maintaining the integrity of the mortgage system. The problems of inflated appraisals identified in the Poconos earlier in the decade are now occurring elsewhere and with increasing frequency. We must fix this problem and hold accountable those who pressure appraisers."
The Attorney General revealed last Thursday that he is suing one of the nation's largest real estate appraisal management companies and its parent corporation for allegedly inflating the appraised value of homes.
"My office's investigation of the housing market has found systematic conflicts of interest in the appraisal industry that clearly necessitate legislation," said Attorney General Cuomo. "Government regulation can help the marketplace by providing protections for investors and consumers alike. Representative Kanjorski's bill is a big step forward in remedying some of the bad practices that have led to the foreclosure crisis facing our nation today, and I applaud his efforts."
"The lawsuit rightly brings appraisal abuses to the forefront as they greatly affect consumers and the housing market," said Chairman Kanjorski. "My bill aims to address the issues in the case, especially those regarding appraisal independence by prohibiting collusion, coercion, and extortion, among other actions. I commend Attorney General Cuomo for taking on such a significant case at this time."
In addition to Attorney General Cuomo, a number of representatives, appraisal associations, regulatory agencies, mortgage originators, and consumer groups also voiced their support for the bill, including:
- Congresswoman Gwen Moore (D-WI)
- Debbie Huber, Appraisal Institute
- David Berenbaum, National Community Reinvestment Coalition
- Eric Haplerin, Center for Responsible Lending
- National Association of Independent Mortgage Bankers
Congressman Barney Frank (D-MA), Chairman of the House Financial Services Committee, is also an original co-sponsor of the bill. The bill also gained support from Republicans Congresswoman Judy Biggert (R-IL) and Congresswoman Shelley Capito (R-WV), who recently co-sponsored the Managers' Amendment, for H.R. 3837, which will be used as the base text for consideration at tomorrow's mark up.
H.R. 3837 addresses the critical need in the current mortgage marketplace to enhance appraisal independence standards. According to a study released by the October Research Corporation in December 2006, 90 percent of appraisers reported feeling pressure to raise property valuations to enable the completion of a transaction.
To rectify these problems, the bill establishes enforceable national appraisal independence standards with tough penalties, improves federal oversight of state appraisal regulators, and strengthens appraiser licensing and education standards. It also aims to enhance borrower protections by improving mortgage servicing and requiring escrows for individuals more likely to experience difficulty with repayment. The bill offers a comprehensive, balanced, and progressive set of solutions to solve these complex, abusive, and deceptive mortgage lending practices.
Congressman Kanjorski, who is the second most senior Member of the House Financial Services Committee, will work with his colleagues on the Committee to incorporate the escrow, appraisal, and mortgage servicing reforms provided in H.R. 3837 into a comprehensive legislative package designed to combat abusive and deceptive lending practices in the subprime marketplace. The House Financial Services Committee has announced plans to consider H.R. 3837 on November 6.
Click Here to read a supplemental sheet with statements of support from the National Community Reinvestment Coalition and the National Association of Independent Mortgage Bankers, as well as a list of supporting groups.
1 National Appraisal Survey, October Research Corporation, December 2006, www.octoberresearch.com
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